Six months after its acquisition by Stripe, Nigerian fintech startup Paystack has announced its official expansion South Africa. Founded in 2015 by Nigerians, the payments company, which powers businesses with its payment API has maintained active presence in Nigeria and Ghana.
Since expanding to Ghana, Paystack has grown and claims to power 50 per cent of all online payments in Nigeria with around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions and online betting companies. Some of its customers include MTN, SPAR and UPS, and they use the company’s software to collect payments globally.
Paystack’s South Africa expansion began with a six-month pilot phase that likely started a month after Stripe’s acquisition. During this phase, Paystack reportedly worked with different businesses and has grown a local team to handle on-the-ground operations.
“South Africa is one of the continent’s most important markets, and our launch here is a significant milestone in our mission to accelerate commerce across Africa,” said Paystack CEO Shola Akinlade of the expansion. “We’re excited to continue building the financial infrastructure that empowers ambitious businesses in Africa, helps them scale and connects them to global markets.”
“For many businesses in South Africa, we know that accepting payments online can be cumbersome. Our pilot in South Africa was hyper-focused on removing barriers to entry, eliminating tedious paperwork, providing world-class API documentation to developers, and making it a lot simpler for businesses to accept payments online,” said Paystack’s Head of Product Expansion, Khadijah Abu.
Also commenting on the expansion, Product Marketer at Paystack, Abdulrahman Jogbojogbo, said: “The opportunity for innovation in the South African payment space is far from saturated. Today, for instance, digital payments make up less than half of all transactions in the country. So, the presence of competition is not only welcome; it’s encouraged. The more innovative plays there are, the faster it’ll be to realize our goal of having an integrated African market.”
“Our goal isn’t to have a presence in lots of countries, with little regard for service quality. We care deeply that we deliver a stellar end-to-end payment experience in the countries we operate in. And this takes some time, careful planning and lots of behind-the-scenes, foundational work,” he added.
In 2018, Paystack had raised $8 million Series A which it planned to use for its Ghana expansion. In October 2020, US payments giant, Stripe, acquired Paystack for $200 million, to open a huge route to the African market.
Before acquiring Paystack, Stripe had added 17 countries to its platform in 18 months, but none from Africa. Paystack was to be used to achieve that purpose, according to its CEO, Patrick Collison.
“There is an enormous opportunity. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30 per cent every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050,” Collison had said after the acquisition.